Cove Energy PLC : Mozambique Tax Clarification...

PRESS

10th April 2012

Cove Energy plc (the "Company" or "Cove") Mozambique Tax Clarification

On 2nd March 2012 Cove announced that it was seeking clarity on a possible tax charge to be levied by the Government of Mozambique (the "Government") in relation to the indirect transfer of the Company's 8.5 per cent participating interest in Rovuma Offshore Area 1 and its 10.0 per cent participating interest in Rovuma Onshore block (together the "Mozambique Assets") which would arise on the takeover of the Company (the "Transaction").
Following discussions with various representative bodies of the Government, Cove has received written clarification in relation to the basis for, and method of calculation of, the proposed tax charge.
Pursuant to the terms of this written clarification, the Company is able to announce that the
Mozambique authorities have indicated the following:
• the Company will be subject to Mozambique corporate income tax on the imputed capital gain arising on its Mozambique Assets as a result of the Transaction (the "Taxable Gain"); and
• the effective tax rate to be applied to the Taxable Gain will be 12.8% (after applying available tapering relief to such gain). The tax return must be submitted within 30 days of completion of the Transaction; and
• the formal sale process, including the dispensations granted by the Panel on Takeovers and Mergers in connection therewith (as detailed in the announcement by Cove on 5th January 2012), continues.
Discussions with possible offerors are ongoing. However, there can be no certainty that any offer will be made for the Company, nor as to the level of any proposal or offer that may be made. The Board reserves the right to reject any approach or terminate discussions with any interested party or possible offeror at any time.
Further announcements will be made in due course, as and when appropriate. For further information please contact
Standard Chartered (Financial Adviser to Cove) [phone]
Amer Baig Geraldine Murphy Rob Tims
Hein Pieter Boers
Aditya Yadav
Cenkos Securities plc (Nominated Adviser and Broker to Cove)
Jon Fitzpatrick [phone]
Ken Fleming [phone]
Joe Nally (Corporate Broking) [phone]
FTI Consulting [phone]
Billy Clegg
Edward Westropp
A copy of this announcement will be available at www.cove-energy.com. The content of the website referred to in this announcement is not incorporated into and does not form part of this announcement.
Standard Chartered Bank ("Standard Chartered"), which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting exclusively for Cove and for no one else in connection with the matters described in this announcement and will not be responsible to anyone other than Cove for providing the protections afforded to clients of Standard Chartered nor for giving advice in relation to the matters described in this announcement.
Cenkos Securities plc (which is authorised and regulated in the United Kingdom by the Financial Services Authority under FSA number 416932) is acting exclusively as Nominated Adviser and Broker to the Company and is not acting for or advising any other person and accordingly will not be responsible to any person other than the Company for providing advice in relation to the contents of this announcement. Neither Cenkos Securities plc nor any of its affiliates owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a customer of Cenkos Securities plc in connection with this announcement, any statement contained herein or otherwise.
This announcement is not intended to, and does not, constitute or form part of any offer, invitation or the solicitation of an offer to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of, any securities whether pursuant to this announcement or otherwise. The distribution of this announcement in jurisdictions outside the United Kingdom may be restricted by law and therefore persons into whose possession this announcement comes should inform themselves about, and observe, such restrictions. Any failure to comply with the restrictions may constitute a violation of the securities law of any such jurisdiction.
Disclosure requirements of the Takeover Code ("the Code")
Under Rule 8.3(a) of the Code, any person who is interested in 1% or more of any class of relevant securities of an offeree company or of any paper offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any paper offeror is first identified. An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any paper offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 pm (London time) on the 10th business day following the commencement of the offer period and, if appropriate, by no later than 3.30 pm (London time) on the 10th business day following the announcement in which any paper offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a paper offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.
Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1% or more of any class of relevant securities of the offeree company or of any paper offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any paper offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any paper offeror, save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 pm (London time) on the business day following the date of the relevant dealing.
If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a paper offeror, they will be deemed to be a single person for the purpose of Rule 8.3.
Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4).
Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Takeover Panel's website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the offer period commenced and when any offeror was first identified. You should contact the Panel's Market Surveillance Unit on [phone] if you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure.
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